Not upheld: irresponsible lending complaint against NewDay Ltd trading as Marbles

Decision detail

Summary

Miss H complained that NewDay Ltd trading as Marbles irresponsibly lent to her by approving a credit card with a £600 limit in August 2022 and increasing it three times to £3,800 by July 2023. The ombudsman found that while Marbles should have conducted further affordability checks at initial acceptance (given Miss H's prior default, high debt to income ratio of 51.13%, and recent arrears on another account) and at the July 2023 increase (when her unsecured debt nearly trebled in four months), the complaint could not be upheld. This was because Miss H failed to provide bank statements requested by the ombudsman, making it impossible to determine whether further checks would have prevented the lending. For the November 2022 and March 2023 increases, the ombudsman found Marbles' checks were proportionate given Miss H's reducing debt levels and consistent overpayments on both accounts.

The Ombudsman's reasoning

The ombudsman applied the principle that lenders must make proportionate affordability checks before approving credit. While the ombudsman found that Marbles should have conducted further checks at initial acceptance (given the prior default, high debt to income ratio, and recent arrears) and at the July 2023 increase (given the near-trebling of debt in four months), the complaint cannot be upheld because Miss H failed to provide the bank statements necessary to determine what those further checks would have revealed. The ombudsman stated it would be unfair to conclude Marbles shouldn't have lent without knowing whether further checks would have prevented the lending. For the November 2022 and March 2023 increases, the ombudsman found Marbles' checks were proportionate given the reduction in overall debt and Miss H's consistent overpayments on both accounts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website